US federal government and 17 states launch antitrust lawsuit against Amazon – JURIST

The US Federal Trade Commission (FTC) and 17 states sued Amazon on Tuesday for anticompetitive conduct that, they claim, has helped it maintain its “monopoly power” in the online superstore market and the online marketplace services market. The federal and state governments are asking that the US District Court for the Western District of Washington stop Amazon from engaging in these allegedly anticompetitive behaviors and restructure their business to avoid such behavior in the future.

The complaint alleges that Amazon has maintained its monopoly power through a course of anticompetitive and exclusionary conduct in violation of federal and state law. These activities include anti-discounting practices and coercing online sellers who want to be “Prime eligible” into using “Fulfillment by Amazon.” According to the complaint, Amazon makes Prime—a premium delivery service offered by Amazon—eligibility “critical” for sellers to reach its enormous base of shoppers. The complaint asserts that these practices violate the Federal Trade Commission Act and the Sherman Act. Additionally, the complaint contains multiple state anticompetitive law violations for most of the states involved in the litigation.

The complaint also asserts that Amazon’s “Project Nessie” is a part of its scheme to maintain its monopoly status. Much of the information about this project is redacted from the public view of the complaint. However, from what is not redacted, the project appears to be an algorithm that Amazon uses to select its pricing system.

The complaint requests that the court declare that Amazon has violated the above-mentioned laws. Additionally, it demands that Amazon be permanently enjoined from engaging in its alleged unlawful conduct and or similar conduct with the same or similar purpose and effect.

In response to the complaint, FTC Chair Lina Khan stated:

Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies. The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.

The announcement comes amid another major antitrust lawsuit led by the US federal government against Google. Much like the government’s claims against Amazon, the US Department of Justice (DOJ) claims that Google monopolized “multiple digital advertising technology products” in violation of Sections 1 and 2 of the Sherman Act. In the case against Google, the court began hearing opening arguments on September 12.